when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership. good morning from new york. i'm chris hayes. the associated press is reporting egypt's top court is expected to rule on the new constitution after thousands of morsi supporters showed up to protest outside the court.

killing three afghan soldiers and three civilians. right now, i want to start with the story of the week. the tax man cometh. the main thing between president obama and congress over the fiscal curb is the unraveling of the con sen sense. glover nor quis managed to get every single republican running for office from school boards up to president, signing a pledge that reads, i pledge to taxpayers to one, oppose any and all efforts to increase the income tax rates for individuals and or businesses and two, oppose any net reduction or elimination of reductions in credits unless matched dollar for dollar. his pledge has been useful to the republican party for a number of reasons. first, it led the republican party to push tax policies that move hundreds of billions of

dollars into the bank accounts of wealthy people. it's also given the central right a single, simple policy objective to pursue, no matter what. a kind of north star for modern conservatism. now, members of congress seem to be losing their way. >> there's a lot that has been said about this pledge. i will tell you, when i go to the constituent that is reelected me, it's not about that pledge. >> i believe we shouldn't raise rates, but i think grover is wrong when it comes to we can't cap deductions and buy down debt. i will violate the pledge for the good of the country if democrats will do entitlement reform. >> i'm not obligated. i was just elected. the only thing i'm honoring is the oath i take when i serve in january. >> they pledge 20 years ago, 18

years ago for that congress. if i were in congress in 1941, i would have signed a declaration of war against japan. i'm not going attack japan today. >> that's a good one. opposition to increasing taxes, the question you have to ask is why now? the most obvious reason has to do with the election results. tax rates for the wealthiest filers was debated. the raise the taxes side won. the cut taxes for wealthy people lost. in case you don't believe the votes cast, look at the polling. the deeper reason we are seeing a shift on the politics of taxes is that the actual facts of the matter change. when the great tax revolt started, americans were paying a lot of taxes. they challenged it into prop 13

in california and required a two-thirds majority to impose new taxes. years later, reagan won office promising to cut taxes especially for those at the top. now, 30 years later, americans are paying less in taxes than anytime in recent memory. a total tax burden, federal, state found a household making 355,000 in 2010 paid 42% of income in taxes down from 49% back in 1980. a household making median income saw it decline to 27.7% now. so, it's not surprising that as the tax burden has fallen, american public opinion about taxes changed. in 1980, 60% of americans said they paid too much in taxes. 30% said they paid the right amount. this year, amazingly, a plurality of people said they

pay the right amount of taxes. 46% said they pay too much. a campaign to lower taxes. when they got in power, lowered taxes and took away the promise to lower taxes. it is why we are poised on the brink of the first successful increase since the first clinton budget back in 1993. while raising taxes on the wealthy is justified and necessary, it's just the first step in a long journey toward the future. one that requires not just the wealthy pay more in taxes. two strange facts in comparison to other democracies. we are taxed ranking 30th. we also have, at least on the books, one of the most progressive tax codes. in terms of the distance from the official rates, those at the top and the bottom pay. of course, what is system produced is some of the worst

inequality in the world. underfunding in infrastructure. the solution to this problem in the long run and the solution to an ageing population where health care will consume a greater part of the economy is for everyone to pay more in taxes and guarantee a form of public goods. the most successful democracy is where it is structured around universe albens where everyone pays in and makes use of what the state provides. now, no leaders are making that argument. in the short run, they are right not to. getting rid of the entirety of the bush tax cuts for all brackets hurts the recovery. once we are in the recovery, we have to do at least that and more. the question is, does the death of the consensus mean american voters are ready to hear that? how will this president or the next make the case? joining me today, governor of

connecticut, a senior research fellow at george mason university. senior economic director at naacp and a fellow at the roosevelt institute. it's great to have you all here. i like when i do these spiels, listen to withering criticism from the panel. what do you think of the thesis, at least about the politics of the undoing of the consensus? >> i think this focus on grover is just it's wrong. i mean grover is just one guy advocating for a position that i think is sound. i mean we know that taxes are wrong for the economy. the problem right now is not about grover. the problem right now is about this debate. actually focusing on the treat, whether we are going to raise taxes on the top 1% or 2%, how we're going to do it. and we are not focusing on the fourth, which is this gigantic

crisis in entitlement spending that is coming. >> there's not a gigantic crisis in intelligence spending. >> really? >> here is what i looked at. i want to stay on taxes for a minute. the projects right now about the medicare trust fund is above what the average has been for the projection of the life of the program. for the life of the program, the average has been 11 years. the affordable care act added five years to that. let's table the entitlement part. i think you are right that the obsession with, as you call him, grover, i call him mr. nor quest is replaced. obviously, it's not just him as person. there's eight constituents who don't want to pay more taxes and sbrents. grover and the tea party are one in the same.

who holds what over in the primaries and whether republicans feel being in office is more important than doing the right thing. that's what the question is. we have seen a lot of tea party candidates win primaries. it cost them senate sees this year. that's the discussion. whether it's the tea party or grover or both, that's the discussion. the one thing i take you to task about is you left out the military spending side. the role that two wars unpaid for have played in the run up as well as a drug benefit that was granted in the bush administration without a plan to pay for it, either. >> deciding vote for which, i have to say this every time it comes up. the deciding vote cast by paul ryan. it passed by one vote in the house. paul ryan, fyi. >> he owns a system that cost us dearly. rightly or wrongly, dearly because there's no way to pay

for it. this idea that's grown up since the '70s tharks you can have just what you have before and not have to pay for it unless a democrat happens to be president, then you have to pay for that and everything before it. >> here is my question. elizabeth, one of the reasons i wanted to have you here today is you are doing interesting work that i heard you talk at an event. the history of politics of taxes more or less. what's interesting is we tend to talk about it like each side has a direction they want taxes to go. maybe there's an equilibrium. if taxes are too high, they are past this equilibrium. if taxes are too low and you can't fund the government, that creates a backlash and they go up. i wonder if that's how you think about it or that's how the hisry played out. >> what impresses me is americans have been more open to

revenue raising and tax increases. the period i study is the post war period in the united states, between the '40s and '70s. states were facing fiscal pressures. they raised taxes. this is republican governors and lawmakers, democratic governors and lawmakers. they found that individuals, you know, the voters, the taxpayers were willing to retain those taxes when put on the ballot. there's an equilibrium, you can go too far either direction. americans are actually quite happy with using revenue to solve the budget impasses. i think we have gotten out of practice, politicians in particular. >> can i add something? it's an interesting point, then at the federal level, what's fascinating is it did you want

matter how high top marginal race has been in the last 50 years or 60 years. the ability of the federal government to actually collect more revenue as a share of gdp has been fairly constant. so there's this question of the political willingness. are we in this federal government like 18% or something, is this like a political equilibrium? >> economic. 17% to 22% of gdp. >> when you look at the hike. >> i want to talk to someone who was there at the incarnation of the side and who now says that revolution needs to be put out of its misery for lack of a better term. a reagan tax adviser, next. ♪

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so, whether grover is or is not the actual issue, we have a convenient symbol for a larger set of horses. he's a damn good organizer. as the son of an organizer, i'm impressed. >> that is the symbolism of his pledge. it's a big shifting point. you couldn't discuss the idea of raising tax rates. the last time it happened was clinton, '93. this really does make a formative change. i think it's creating a lot of opportunity. see how it plays out. a mixture of economic reality and hopefully political momentum. you can see, you know, one thing that wasn't in your little monologue was looking at -- >> just go at it. it was terrible. >> no, it was great. you can only do so much in three or four minutes. how does it fit into the fiscal

crisis? you can't have a great economy when wealth is at the high end. you need a strong, broad based economy. >> the debt ceiling leverage. we have seen it used before. here he is talking to mike allen about how he sees the strategy of this playing out. >> this president is not going to extend. he loses his leverage that way. >> republicans have other leverage. they can give him debt ceiling increases once a month, have them on a rather short leash, here's your allowance, come back if you have behaved. >> wait. you are proposing the debt ceiling be increased -- >> monthly. monthly if he's good. weekly, if he's not. >> it's no -- note that in the opening offer, getting rid of

essentially this debt ceiling procedure was part of that. i think probably because of precisely that. i want to bring in bruce bartlett. he's an analyst from the reagan and bush administration. bruce, you were there at the beginning of the supply side revolution, the tax revolt. i guess, what is your sense of how it's evolved and what the poll -- how the politics have changed over time. >> first of all, in the late 1970s, early 1980s, taxes were, in fact, at a historical high. more importantly, they were rising rapidly. we had high inflation. the tax system was not index for inflation. people pushed into higher tax brackets. we needed a high tax cut to keep the burden from rising. the taxes as a shared gdp were about the same as they were in

the 1970s. there was less of a tax cut than people imagined. part of the reason for that is ronald reagan raised taxes 11 times after 1981 and this whole history of ronald reagan, the tax increaser has been whitewashed out of right wing history. by 1988, he took back about half of the 1981 tax cut with tax increases. now, i think, today, our economic problems, our fiscal problems are vastly different than they were in 1981. we need different solutions. the idea we have cookie cutter policy, cut taxes, taxes, taxes, all the time. it's the only policy. it's ludicrous. >> governor, say taxes have to go up. i think they do. let's stipulate that for a second. how do you make the case? you actually had this experience. you had a big budget short fall when you came to office, you

raised taxes, how do you make the case? >> two things. we had an election about it. it's going to take care of the issue. it's appropriate to put it in the context the president put it in. we are going continue a lower rate for a bunch of people. we have to look at revenue from somebody. on the state side, when i got elections a $3.65 billion deficit. the worst in the nation. i quickly realized it's too large to tax your way out of or to cut your way out. it had to be a combination. that portion hasn't happened to the extent we presumed it would. this year, we have to trim expenditures by $365 million more than we otherwise would have. but, the grand bargain with the public is, to maintain a level of service they have a comfort level with. to not overdo it, not overextend

ones self. >> when grow to voters and say, we are going to raise taxes, what is the pitch? >> i did 14 town hall meetings, no, 17 town hall meetings and got yelled at at every single one of them. we had a conversation with the public about what are the options. if you are talking cutting a budget by 17% because that's what the revenue short fall was, they quickly understood, you can't cut a budget 17% in a single year and sustain the level of services that allow their children to be educate and their mother and father remain in a nursing home and receive benefits and so see bridges and roads constructed and replaced. >> i want to talk about the history of how this argument has been made. it has been made in the past. we have amazing fdr sound making this case. bruce, hang out with us, if you would. back after this break. uh...

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1776, the fight was for democracy and taxation. in 1936, that is still a fight. mister justice oliver wendell holmes once said taxes are the prices we pay for our civilized society. one sure way to determine the social conscience of a government is to examine the way taxes are collected and how they are spent. and one sure way to determine the social conscience of an individual is to get his tax reaction. taxes are for all of the dues we pay for the privilege of membership in an organized society. that society becomes more civilized.

government, national and state and local is called on to assume more obligations to its citizens. >> that's fdr in october, 1976. he's running for re-election. it's not a lame duck -- that is about his fourth case. it sounds like another planet given the tax politics. in the history you have been studying, is that an outlier or close to what the argument has been? >> lawmakers made the argument in two ways. you clearly try to link the revenue raising that you want to do to the social investments. the malloy approach. >> exactly. >> the way to do it is training on the austerity that is going to result if you don't bite the bullet. look at california. it was the vanguard of that movement. in this past election, facing a fiscal cliff of its own, the

prospect of trigger cuts, if they didn't adopt proposition 30 if they raise taxes. they decided to go for the tax increases and that's because they saw what that austerity could mean. you really have to do both. we talk about the investments and the costs. >> please. >> i was going to say, the federal level, one of the things we saw in 2000, i know you want to keep taxes and spending separate, but i think we shouldn't. what we have seen is a great pitch to reduce taxes. again, i'm in favor of it. the route to great economic growth. that being said, it is not true, even with the best tax cuts when you spend like a drunken sailor, which happened under the republicans. if you cut taxes and increase spending, that's the equivalent of raising taxes in the future. i think it's key to keep those

together. >> bruce, do you think there's a case to be made to fellow conservatives about raising taxes here? >> yes. first of all, the -- one of the problems with the norquist if you raise the taxes, there's -- she's incorrect. she's assuming the taxes will rise to pay for spending. narquist will not allow it to happen. it used to be the main constraint was the fear it would lead to higher taxes. if it never arise, you can have your cake and eat it too. we reduced the tax cost of spending. if you look at the long term budget forecast, one of the main drivers or long term spending is interest on the debt. if we don't raise taxes, we are automatically causing an increase in spending.

so, we need higher revenues, both to restrain spending and to change the dynamics of the fiscal process. >> i don't agree with you, bruce because actually -- >> surprise, huh? >> actually, we're having this conversation about increasing taxes because while you are right, taxes don't go up immediately, what happens is you end up with large deficits. you end up with a lot of debt. as a result, because people don't like debt and deficit, that opens the door to rather than cut spending, increase taxes. i think there is a real connection. >> if you raise the taxes first, then you wouldn't have the deficits. >> well, i mean -- >> your idea is so dogmatic you are living in a fantasy world. balance a budget by abolishing medicare and other ludicrous ideas. >> there won't be enough tax

revenue to pay for the large spending increases -- >> that's not true. that's not true. it's a factually incorrect statement. let me point out something important. federal revenues are 15.8% of the gdp. it's way, way below the historical average. if we could get up to the post war average. >> if we could get up -- >> we would knock $15 billion a year off the deficit. >> this gets to the key roll that growth plays. i know you want to respond. i want to take a quick break. health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. so i never missed a beat. that's health in numbers. unitedhealthcare. [ male announcer ] it's that time of year again. medicare open enrollment. time to compare plans and costs. you don't have to make changes.

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governor malloy. >> this is the problem, right? there are no rules in washington. when there are rules, they get changed to any argument you like. you can hire an economist to say what you like. >> they are the worst.

>> all you are doing is arguing over the 20% in the middle. >> this is an amazing vision of politi politics. one politician, one economist, it's true. it's absolutely true. any argument, you can get a politician, economist and 40 people. as long as you have a party label. >> exactly. >> then it enters, once you get to 40 and 40, it enters a round where it's debated as if reality is debated. it's not what has been debated in this country for a long time. there are no hard and fast rules that apply. it is the political argument that wins the day, one way or the other. >> taxes are political, right? >> i want to follow up on what the governor was saying. he was given an example and highlighted. we have been talking about fiction, about well, okay, if we cut taxes, the economy gets better. then the fake argument is spend,

spend, spend. in reality, as we are seeing it out, it's a mixture of both. we have to do smart investments, bringing in revenue and be smart in cutting spending. the excitement about this political time is we are discussing on a popular level and people are seeing in california what the initiative is with jerry brown and what the governor is doing. president obama is discussing more and more about the need to raise taxes. it's radical to talk about raising taxes on those who most profitted over the last 20 to 30 years. we are at an opportune moment to get into realities of the challenges of dealing with economic issues. >> then you get a defense budget come out of washington which has in it programs the pentagon is saying we don't want. >> making subs in connecticut. >> they want subs. but, there is a certain reality that -- look at the fence and

what happened this week. it was going to be raised. didn't get raised. in that package were defense budgets the pentagon says they don't want funded. they have to be included in the defense budget. >> i agree. to go back to the tax thing, you have to be careful with two thing that is are overlooked. the american federal system of taxes is progressive, very progressive. >> on the books it is. we should make that distinction. >> it is very progressive and way more progressive than countries like the european countries that have less income and equality. the idea that making it more progressive will address it is actually a real stretch. the other thing is we have to be very careful, you guys. it's not what i want. to be careful about what we wish for. it is a very well known fact of the economists and i agree, that

the people who write the check are not necessarily the one who support the burden of the tax. when, you know, you have the president who is arguing about imposing more taxes on high income people, he, effectively is pretty much saying, you know, there is a chance that this will fall on much lower income earners. i think we have to be very careful. i think that incidence argument you see, i don't know on the top marginal rate how it cascades down. >> there are different ways, but i think for instance, we know economists have been wrong often. so look at the corporate income tax. that's something that affects high income people. it was known for a long time to only be paid by capital. now, economists said we made a mistake. a lot of the corporate income

tax is paid by labor. >> some of it, yes. >> the question is, how much? >> to me, the thing, bruce, i want you to respond to this. whatever taxes are now, they should be lower. it cannot be the case that it is always true of the current tax rate that it is too high. to me, it is genuinely the argument that is being made. it cannot comport to reality when you succeed in cutting taxes. bruce. >> one of the things about the people that they do is try to shift the debate over on to corporations. the real problem, frankly is not that we have a top marginal rate that is too low, it's the structure of the rate structure. the big problem we have at the moment has to do with the taxation of dividends which was justified on the grounds this would help raise capital

formation. there's zero evidence, zero evidence that the 2003 cut in the dividend rate that reduced it from 39.5 6 down to 15 had any meaningful economic debate at all. there's no reason to think if we went back to 39.6 there would be no negative effect. if there's no positive effect, there cannot be a negative effect. during the post-war era, dividends were taxed as normal income and we did fine. >> the political economy of this. it's not just that people are saying what are the studies about this. people who have a lot of money and have a lot of money in dividends don't want the money taxed. they mobilize in ways that have been effective. bruce bartlett, thanks for being here. while washington battles over budget projections 30 years

from now, states are struggling through a brutal austerity squeeze. who it hurts, next. [ male announcer ] where do you turn for legal matters? at legalzoom, we've created a better place to handle your legal needs. maybe you have questions about incorporating a business you'd like to start. or questions about protecting your family with a will or living trust. and you'd like to find the right attorney to help guide you along, answer any questions and offer advice. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions. get started at legalzoom.com today. and now you're protected.

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perhaps the oddest thing about the jumping up and down in washington is that in the near term, at least, it's a ghost dance. that's because the federal government can borrow money, almost for free to pay bills and has a strange and unique ability to print money if need be. the intense fiscal debates are happening not in washington, but state houses across the country. at least 21 states responded by cutting spending. the state that is chose austerity have the following outcomes. unemployment rates jumped up. fewer private sector jobs. states that chose to expand spending experienced unemployment 3.5% higher than before the recession. federal and state are in

decline. to give you an idea of the impact they could have, take a look at the chart. the percentage of revenue these states could lose from the grants do get cut. sequestered the top five states over a 10% loss in revenue. the national average is 6.6%. the bottom five states with delaware suffering the least, still with almost a 5% loss in revenue. for many state that is had to resort to cuts to balance their budget, it may be about to get worse. i think this is, in some ways, the untold story at the national level of the great recession, what it has done to state budgets. walk us through how you, when you sat down, the day after you were sworn in and looked to the books, what is the conversation that happens about a $3.5

billion budget short fall? >> you know, i got elected. i only won by 6,500 votes. i refused to take a pledge not to raise taxes. it didn't make sense to lie to people. it never makes sense. >> we know you love raising taxes in. >> everybody wants to raise taxes. >> i can't wait until i get in that state house. >> i would like to lower taxes, that would be far better. when you are talking 17% of revenue, you can't cut 17% out of a state budget which spends $5 billion on medicaid alone. you can't do it. we have no power to cut that medicaid program. in fact, just prior to my becoming governor, they passed a law under the republican governor, medicaid benefits causing a $95 million hole. i have that hole because of the

action taken. we are honest. it's about time people feel free to have an honest discussion. we also trim very substantially the same service expenditure level. it was a combination of cuts. we went back to state employees. you have to have skin in the game. we saved tens of billions of dollars by re-negotiating our interaction with state employees. you don't get credit for it. i plays out over 20 years. $21.5 billion is a lot of money. it's a billion dollars a year on average. >> there are three places you are sitting thinking of the budget short falls, taxes and revenues, there are service spending and labor, basically, the employees you pay for. we have seen different emphasis in different states.

it's famous what happened in wisconsin and ohio where there's a real effort to go after the public employees. how do you think about balancing the different groups? everyone's got to take -- it's going to hurt. there's no way around it when you have to balance a budget. >> it does hurt. not being able to increase spending -- >> you are proposing education cuts right now. >> we are. most of it is higher not where you can offset. a lot of it has to do with the ability of the institutions to carry forward on a year-to-year basis. i have an explanation if you want it. the reality is, what was built on top of that $2.6 billion projected deficit was a cut in spending for municipal spending, bridgeport, hartford, new haven of $270 million. that would have put 10,000

teachers and support personnel at risk where they aren't graduating 40% of the kids already. >> one of the things, when you add pressure to austerity, it starts to come down. it's the political constituencies with the least power that get snapped. >> oftentimes the groups that have been purt most in the recession or haven't seen their income grow over the last 20, 30 years. what's important is that, i think there comes the realization that one solution of just cutting taxes, clearly to help move an economy forward, you have to think through what is going to help the economy. the idea of austerity, make people lose jobs. it's going to help the economy. in the long run, it's going to be positive for your state. governors see it more quickly and are dealing with it. i'm hoping it becomes more of

the talking point across the country. when dealing with a deficit or dealing with looking at issues of raising revenue, what you are trying to do is what will help move the economy forward. when you understand the cost of different measures, yes, it would be helpful to the economy to make cuts that would hurt a bunch of people with their jobs or basic unemployment. >> we are going to make the pro-austerity argument after the break. wasn't my daughter's black bean soup spectacular?

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all right. joining us at the table is maya, the founder of a non-profit organization tackling economic inequi inequity. we are talking about the underemphasized, undertold story about the great recession from the perspective of the budgets and fiscal battles which tend to focus on washington in the state houses and where states all but i believe vermont, have to

balance their budgets. they can't run deficits. the things that are theoretical are not. you have to do it. it's caused a lot of pain and also it's been an interesting laboratory because there's been very different approaches taken by different parties that have been in power in terms of where the emphasis is. there was something you wanted to say before the break. >> i was going to say, i think we need to be careful when talking austerity. states cut general revenue. when you look at overall spending in most states, it's gone up. it's been able to go up because of massive injection of federal money. i was going to say your experiment at the state level is awesome except now, roughly 30%, if not more of state's budget is actually fed by the federal government. then you can wonder, do we still have a federal system? >> i'm glad you brought that up.

i think there's too little of it. too much is on the stakes. there's an argument in favor of the following. federal government can run deficits. when you have these incredible recessions, you want to do cyclical policy like cutting when things are bad and growing when things are good. maybe the federal government should be handling there and have the revenue sharing that was part of the recovery act. >> i think you are making an important point. when we talk about what's going to happen with the fiscal fiasco, it's a cliff, a political construction. 18% of federal grants to states are at risk. when we hear from governor malloy, what it means for connecticut, it's devastating. one of the things that means is that we have to look at what it means to think about federal support. states are actually the distribution vehicles for

important programs to support people to feed their families. if you just take the woman and infant nutrition program, which is one of the programs we are looking at being slashed, you are talking about people who actually are trying to feed their families working 12 hours a day. states are actually the distribution sources for that. a lot of those funds do come from the federal government. when we cut them, we put states like connecticut in the position they are in. >> there was a trick play. the stimulus came in and said -- >> that's the recovery act, right? >> the recovery act. in that package, we are going to increase your medicaid reimbursement. no one made the changes they might otherwise have made because they were going to get a 60% increase, a large increase representing 60% of the total cost. but that ran out. by the way, it was supported by a bunch of people to do that. in fact, in my state, the

legislature said hey, we are going to offer a new plan with 89,000 enrollees in my state costing $95 million in expenditures this year. there are unintended consequences of let's insert money and by the way, take it out. >> this is an argument against more federal involvement. >> it's a conversation that's been going on a long time, how much they should be helping out. states don't want to give up responsibility but want more support from the federal government. in normal economic times, the state can cut spending, raise taxes, rely on savings. they are not normal economic times. >> over the course of this very long, slow period in our economy, the federal government is playing a smaller role in helping states than any recession since the second world war. that's the reality.

that's why 31 states are having an income problem now. >> we have to distinguish whether it's an argument against. we are saying it has to increase. it's what i hear governor malloy saying. if we are going to make sure people can see a doctor when they are sick, we have to think about how we nationally meet the needs of people. >> immaterial to talk about the consequences and not make -- it's full-time for the "your business" sbrur of the week. christine wants dwrou shop small. the owner of wonder works, a charleston, south carolina toy store. she had a section dedicated to locally made products to make sure her customers dollars stay local. watch "your business" at 7:30 on msnbc. um...

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um... hm... umm... uh... oh ! the windows phone 8x by htc on verizon. it features easy to navigate live tiles that are simple to customize. just pin what matters most right to your homescreen. exclusively with data sense-- a feature that makes the most of you plan. only on verizon. hello from new york. i'm chris hayes where the daniel malloy, maya wile lee and elizabeth from the roosevelt institute. we are talking about the fiscal crunch states are going through. one of the things that made it so intense is it's not just one

year, two years, three years. we are getting into four years. it's a long time. cut the first time around, then come back and cut again. you are really starting to get to the bone. one of the things i saw when coffer covering politics in illinois was the effect people didn't want to make an argument for raising taxes. what it meant was you needed revenue. this idea and this word we hear all the time, i use taxes even though democrats have a focus group. it's taxes. taxes. okay, you can say taxes. when you separate taxes from revenue, we are going to raise revenue, not taxes, you get strange things, it seems. there's all sorts of privatization. take the highway, we are going to sell it to you. lease it back and get a one-time payment from that. this is something that's happening right now in baltimore that i think is pretty fascinating.

take a look. >> i thought it was idiotic. why do we want to look like nascar? look like a bus going down the street. after the shock wore off, this shows how far we have to go to think outside of the box. >> reporter: chicago sold ad space on iconic bridges to bank of america. philadelphia rented out a transitation to at&t. brazil indiana let kfc advertise on fire hydrants. >> baltimore, in case that wasn't there, they are selling ad space on fire trucks. were you tempted? was there anything you were thinking of putting up on the auction block? >> we are not purists. you know, you see things get named from time-to-time. those are extremes. those are extremes that represent the pressure that local and state governments are

under. it's not sexy, but we have generally acceptable accounting principles. we separated ourselves from gap requirements. i know this is boring. as a result, my pred ases sors built up a deficit that wasn't reported as part of the deficit i dealt with. >> the bus is running over and other and over. >> it was a series, this happened over a 20-year period time. >> right. >> you don't report under gap. you extend the fiscal year for income out but shorten it for payments or income in, payments out. you do all kind of crazy things. enter into a 20-year transaction for state employees that guarantee benefits, tieing the hands of future administrations. lots of crazy things happen when there are no rules. for a long time, there were no rules. >> not to mention, you use a

credit discount rate for pension, liabilities. i will say, first states have cut spending but they have to cut way more according to to gao, they have to cut at least 13% every year. their reason is, one of the things we should not forget is one of the things we should do when times are good is actually save money. >> yes. >> it's not what states have done. when time was good, they were spending, spending, spending and spending. in fact, states, when private gdps grew by 5%, the state spending is double. states get their revenue from people. they better well make sure as people are able to pay the bill. >> aren't there two aspects to this? there's what we save, but also what we invest in. we have to invest in people. as the governor said, if you are

looking at $644 million in cuts and education, title one, students who need support, learning disabilities and physical disabilities, those are cut. that goes to the state. it's an investment in the economic future of the state. the one question i have for you governor, there was a new york times piece that was quite informative about the amount of tax give aways to corporations, right? >> right. it's not about raising taxes, it's what we allow as give aways. $80 million a year that states are giving to corporations. do you see that as something you might do in the state of connecticut, cutting off those corporate give aways? >> we are looking at everything. i'll answer that. one of the things that happened, i want to make this point. a lot of states did draw out money in the bank. they put it in rainy day

accounts. in my state, they had a gap of $1.3 million and also had a fund at one point of $1.3 million. i don't have that to call on. with respect to how we treat corporations, a lot of this is about competition between states. i think every state will cut back, if it can. in our state, we have some fees that are higher, some that are lower. try to buy yourself into retaining the jobs you have, attracting jobs you might get from out of country, out of state. it is a competition among 50 states. >> it's completely perverse. from a market, free market conservative perspective, the kind of -- the sort of distortions that are introduced, essentially, the state level give aways, private deals with, you know, i remember in illinois, when they are trying to get boeing to come to

illinois, which was successful. boeing identified six floors of the building they wanted headquarters in. there was a tenant in the sixth floor. they went out and bought out the tenant. it's not what the government should be doing. ypsilanti is suing general motors because they did give aways then closed the plant. >> it's where we put the emphasis between the state and federal government. >> it points to the fact it's a zero sum gain. what do states gain by taking jobs from one state and adding it to theirs. it doesn't reduce the overall unemployment rate. if you close the loopholes, it can bring in more revenue than the crazy schemes people come up with because they don't like the word tax and don't patch the state budget in a sustainable

way. there are tax code reforms that would cut down on the gain and help the federal economy. >> before you get too pure about this, understand -- >> says the governor. >> they have their own tax policies energy costs, property taxes which is a local issue as opposed to the state issue that they have to account for. if we can stop competition, we should do it. but, we don't have those things. it is not an even playing field. let me give you another example. my republican governor colleagues want to see medicaid blocked. almost all of my democratic colleagues don't want to see it done. most of the democrats represent state that is will not enter into a race to the bottom when it comes to medical benefits. connecticut is never going to act as one legislature did in a state to deny a kidney

transplant to somebody whose life will be saved by it. if you block grant it, you have a bunch of states that are not going to do this or this. there are states that are trapped. they wouldn't tolerate putting someone to death over a bad kidney. this is a serious argument. we can all talk about how we compare ourselves. understand, underlying all of that is we are not comparable. >> i actually think you are making a really, you are giving me a great opening to tell you why there's problem with gigantic interaction in states. in many cases, your kidney transplant is one, it's very sad. it's very sad that some states say it will resort to not paying for a transplant. the counter part of this is when a lot of states asked the government for permission to cut non-emergency and non-life threatening items from medicaid

payment, federal government said no. so, the problem with the federal government is it comes with string attached, is often a one size fit all and it's also, often tie the hands and it's around priorities that are like very hard to understand. >> with all due respect to that argument, this administration and specifically secretary sebelius gave more leeway to states that prior administrations combined. those things are happening and they need to happen. they need to happen. but, we have to have a basic safety net. we don't put people to death because their kidney's stop working. >> we have to separate two things here. it's one thing to say there are particular types of decisions federal government may need to change. it's different than saying it's a problem they are creating minimum standards for states to make sure all citizens are getting the services they need. >> the history here, there is a

huge difference. there's a spectrum about the safety net stuff. it's different constituencies. one of the things federalizing it does is ensures a basic guarantee of safety net. democratic governor from the great state of connecticut, a pleasure to have you. please come back. the world east most liberal marijuana regime is about to begin here in the united states. the world east most liberal. that's next. two years ago, the people of bp made a commitment to the gulf.

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a far side this sunday morning. on thursday, this country will begin a new social experiment that i don't think has received the amount of attention it deserves.

when the citizens of washington state will be able to buy and sell marijuana under a system that is more liberal than any other system in the world. under the 18 states that allowed the sale and distribution of marijuana for medicinal use. washington, along with colorado became the first states to legalize the drug completely just like they can with alcohol. residents will be able to buy, sell, consume and carry marijuana as long as they are over 12. full leaguizatigalization of ma. now, how do you manage it. a one year period to develop rules. the state's liquor control board which will regulate is sale of marijuana has little insight in what to do. things aren't as complicated in colorado where the medical

marijuana is in place. they will likely build on the already existing medicinal model. not only will it be regulated in these states, but taxed. the promise of this new source of revenue is a selling point to voters. in washington, it will be a rate at 25%. it's estimated to generate a whopping $600 million a year. in colorado, it's a tenth of that. since none of this has been done before, no one knows what the estimates are. we are about to find out. joining me at the table are senior writer at newsweek and the daily beast and the author of the new pop barrens." an assistant professor at the university of florida's drug policy. all right. kevin, i guess i want to start with you on this. the big question before we get to how this is going to go is

what is the federal government going to do about it? it is clearly the case that marijuana is still an illegal drug according to federal law, selling it, trafficking it, doing all the things that are legal under federal law. now this huge question arises. having worked in the white house on this issue, what is the obama administration going to do? >> the president has been clear he's against legalization. we know we are going to have a cheaper drug, more people are going to use it. it's going to be more socially acceptable. it's a problem in one in six kids. it can be a problem on the roads and learning iq. the administration is against it. what the justice department does because they have ten different legal things they are trying to do. that's the more interesting question. federal is federal law. i can't imagine the administration is going to say they are okay with retail sales.

you might be able to have people grow their own. i think if the governor of colorado was right to say not to break out the cheetos just yet. a lot needs to be ironed out here. >> the studies and negative consequences. there's a lot of interesting gain on this. there's data with no effect. some that finds some negative facts depending on when kids smoke it. it has to be compared to alcohol. in some ways, that becomes a big issue. there's lots of negative effects of alcohol. >> it's legal because of a cultural history. marijuana -- >> it's legal because we tried to ban it and it was the biggest policy disaster arguably. >> it was criminalized when it was prohibited.

cerro sis of the liver went down. the issue is current policy is not perfect. it's the bottom line with marijuana. policy isn't perfect. legalize. it's been the narrative in the media. false dichotomy. we are do a lot of other things like not target hispanics and blacks when it comes to arrests. let's change those things. the idea that we want to treat it like alcohol and tobacco has an industry that sells to kids and is commercialized. >> the case for marijuana needs to be done on its own. >> you look like you want to jump in. >> for this notion of health effects, chris made the point, it's also cigarettes. they are legal. we are not allowed to sell them to kids. we regulate them. government recovers 66% of the profits on a package of cigarettes and we regulate.

i don't want my kids smoking cigarettes and we have made it illegal. i think you are right. the way it's going to happen is states are going to start innovating. it's going to put pressure. >> for every dollar we get in cigarette and taxes, we -- we have to look at that. >> what we have done by making it harder to smoke in public places and increasing the cost of cigarettes is we have seen a great reduction in the take up of cigarettes by young people. so we have had -- we have actually impacted attitudes and behaviors. >> the idea of the industry is nothing. the big open question is a, what is the federal government going to do. what does a marijuana facility look like? i'm glad you raised that and had the doritos line. people joke about it. marijuana is funny. when we come back, president obama at a town hall when making

his argument not in favor of legalizing marijuana in 2009. we are going to see that clip and you are going to talk about what the marijuana industry looks like and what the future is after this break. now with a fancy coating that gives you a burst of wildberry flavor. now why make a flavored heartburn pill? because this is america. and we don't just make things you want, we make things you didn't even know you wanted. like a spoon fork. spray cheese. and jeans made out of sweatpants. so grab yourself some new prilosec otc wildberry. [ male announcer ] one pill each morning. 24 hours. zero heartburn. satisfaction guaranteed or your money back.

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get $0 down, $0 due at signing, $0 deposit, and $0 first month's payment on any new volkswagen. visit vwdealer.com today. i have to say that there was one question that was voted on that ranked fairly high. that was whether legalizing marijuana would improve the economy and job creation. and -- i don't know what this says about the online audience but i just want -- i don't want people to think this was a fairly popular question. we want to make sure it was answered. the answer is no, i don't think it is a good strategy to grow our economy. >> president barack obama formally of the gang joking about legalizing marijuana.

one of the things that's great for your reporting has been phenomenal on this. it's not -- we are in the process now of migrating from the let's say the gang and doritos era to the professional era. what does that look like on the ground in these states? >> colorado, where i focus most of my reporting has the only for-profit market in the world from wholesale to the stores. we need a doctors recommendation, it's easy to get. it's what washington state is going to set up now. it's big brother. the regulations are tight. 280 pages of notes. cameras in every room. badges for every employee. little tags on every single plant. you have to account for everything. every leaf, every stem. there's no diversion. if you did a cut and paste of

the colorado model there's a basis for what many think is the future of marijuana. there's an interesting clash of cultures. big businesses profiting in colorado, all the talent is what developed under prohibition. the morning commute is guys in suits next to guys in sweat pants. it's stoners and investors side by side. it's going to change but not in the near term. >> as recently as the '70s. the tobacco companies had evidence they were interested in getting into this. we have the fields to grow it, the tractors to roll it. we are ready to go. we have trademarks that would be legal trademarks. i think -- i mean there are a lot of scary things said about

marijuana. a lot of it unjustified. some of them are justified. this is issue of big industry. we are not going to have a tobacco industry that lied for 80 years to kids and said cigarettes are medicine and had doctors in their ads. when i worked in washington, the alcohol industry is huge. they fight every tax increase tooth and nail. beer ads are good because they are meant to hook kids. >> i think that, i totally agree with you. i think your earlier point about decriminalization is important. there's a huge economic impact in criminalization in terms of the number of people incourse rated, the about to get a job afterward. i don't want to diminish that point. it's a tough issue. if we look at it on the other side, there's so much social science data that shows the best way to control the behavior is to find ways to eliminate it out

in the open. cigarette smoking and the impact of reducing young people's taking up cigarettes. >> david? >> i want to pick up what maya mentioned. a concern i have is the question of legalization of marijuana can overshadow the subissues we were talking about. the drug use and effects it has. >> disproportionate facts on latinos. >> in california. >> in dealing with, you know, the health issues. sometimes i think the debate is like legalization, like we were talking earlier. cutting taxes could solve our problems instead of looking at it. >> we want to create this like a health issue. if we had cancer, would we say in early stage cancer, give them a $100 fine. no, if they have a health issue.

>> the thing that is key here, we are running the experiment now. we have been having this debate in the abstract. one of the things here, two things. what i find fascinating is it's as much a test of setting up a regulatory regime as a test of legalizing marijuana in prohibition. the question is, is there going to be a huge black market that is going to emerge? are you going to have -- is this going to spiral out of control? >> i think it will be. >> i have to say, i did not like do a hard study, but $600 million a year sounds high. >> 25% at the retail end. i mean, if you are talking right now, $250 to $300 is going to come down. a $25 tax? canada had to repeal a cigarette tax, $5 in taxes in the '90s. marijuana is something people

know how to use on the black market. it's a black market market. it's going to be widespread. >> how are they attacking that problem? in colorado, that's why you call it a big brother regime. they are afraid of that. >> yes. i mean they are attacking it by there's zero room to operate. it's important to note, none of the projections for the medical market have been met. the revenue projections. the office of enforcement in charge of regulating industry is funded. they had to ask for it to pay for it. >> they were making the argument of medical marijuana. >> the idea was we are going to have x-number of customers and stores and have fees. it didn't work out. >> one of the things that's interesting, the medical marijuana was seen as the camel's nose under the tent. this was the first way of

getting it to. this is after california and arizona leaguized it. it's coming up all over the country. this is a national legalization of drug strategy. i see this as not dealing with the terminally ill, it's legally authorizing it across the united states. >> he was right. >> he was exactly right. there's the taxes. i want to talk about what the social effect is going to be. what does this look like and what the consumption of the drug is going to look like right after this break. walmart have tp to bring you a low-priced medicare prescription drug plan. with a low $18.50 monthly plan premium, select generic hypertension drugs for only a penny and in-store copays as low as one dollar on other generic drugs after deductible, saving on your medicare prescriptions is easy. so you're free to focus on the things that really matter. call humana at 1-800-808-4003.

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are we about to enter a week that we will remember as the beginning of the end of the war on drugs? that's the question. i think it's worthwhile going back to the genesis, the creation myth started by richard nixon as part of a culture war politics tool box.

we have great tape of richard nixon talking about the issue from the nixon tapes. can i say, you think you would know the best parts, but there's always better stuff in there. this is nixon in 1971 talking to bob about marijuana. take a listen. >> now, this is one thing i want [ bleep ]. marijuana can i get that out of this [ bleep ]. a summery this morning about it. the marijuana thing. i want to hit it right square. immaterial to hit it square in the puss. we have ended the part where he speculates in a fashion about the relationship between jewish lawmakers.

we have edited that out. that's the place where this is coming from. i think some of the skepticism against the war on drugs is born of the fact it was sold in this incredibly cynical way. >> there's a lot of cultural baggage with this. >> it's a nixon phrase. >> so instead of figuring out this cultural stuff, look at today, the health, the data and not make -- i know a lot of people have baggage from vietnam, anti-nixon. it's a lot of baggage. it's time americans grow up and have a real conversation about it. >> is consumption going to increase? are more people going to smoke it? >> the united states smokes three times it amount of marijuana the rest of the world does. >> is that true? >> per capita. >> really? >> three times it global average. >> really? why do we smoke so much weed?

>> we do a lot of things. >> can we say, black and latinos do not smoke at the same rate as whites. there are also racial differences in consumption. >> the flood gates, i believe, will open when legalization is open in these states. you are going to see at least a doubling and more. it's not only my opinion. economists believe it to be true. would i smoke marijuana if it were available at the corner store? yes. it would be replicated. it's advertising availability. there are things we could do to make it better, improve the health issue. >> so, if this consumption increases, this is an important part to the public opinion. one thing they make about

decriminalization has to do with the way the war on drugs is. public opinion in legalization in african-american communities, my understanding is quite different than what it is among whites. it's lower. i'm curious, as someone from the naacp, whether you have seen this up close? is this something the organization is talking about? >> there's a lot of discussion. there's a separation. you can talk about the different wars you can have. our community suffered so much from that, the community stands strong about the negative effects of criminalization and the war on drugs. then there's the issue of you have a war on drugs, which is community is for as a public health issue, that's part of the community. we have incarceration tearing us

apart with the official war on drugs and drugs tearing apart our community. you can have a conversation about it. african-americans flock to legalization. we know drugs have a negative effect as well. >> i think it's very important. public opinion is formed by people's experiences. if your experience is you get slammed by a cop -- my daughter and her friends can't stand on the street in front of their apartment building because the cops are going to harass them. plus, you have the fact that there are serious drugs in communities of color. of course opinion is going to run on any drug in the black and i think latino communities as well. on any drug. but the consumption is much, much lower. it will probably go up. one of the things that will be very interesting to see is how does consumption change in

colorado. denver does have black folk and latinos. i have seen them. and they have four five and up to 13 times incarceration rates even with lower usage. what happens? your point of this experiment is it's going to be important to look at race. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪

we are talking about marijuana legalization in the context of this progressive critique of the way the war on drugs has been waged. here is marijuana arrests by administration from nixon to obama. this is one of the things about the war on drugs, it goes up and up. through 2010, it's down quite a bit in the obama administration, that's at the federal level. if you look at the local level, it goes up and up. a question is, are we going to see this, if this is the solution to the kind of impacts that we have seen on the war on

drugs, are we going to see in colorado and washington this be the solution to that? >> i'm not convinced. there are two important points to make about the arrest. the first is yes, 750,000 a year are arrested on marijuana charges. they are not sentenced. fewer than 400 people are in state or federal prison for marijuana possession alone. it should be zero. it's not the prison clearing solution. >> let me make one point about that. >> this is something that comes out of the work. misdemeanor arrests are a way of marking, particularly young african-american and latino people. even if they don't end up in prison, you bear the mark of the criminal justice system. >> point two is -- >> i'm just taking your same point. sorry. >> will young people no longer bear the mark under

legalization? it's still illegal if you are under 21. most smoke it before you are 21. it's illegal to smoke outdoors in colorado and washington state. the consumption patterns are not the basement smoke session. it's the stoop or the park. >> if you have african-americans smoking less marijuana, you know, relative to the population size and we are still getting incarcerated, it's not going to solve the problem. we get arrested for standing outside our own, you know, apartments and these types of things. >> the other driver, when legalization is here is the enforcement. you get pulled over, a cop wants to hassle you, finds marijuana, you go to jail. you are at a concert, you are outside, carrying slightly too much. cops are still in the process of

forcing legalization could have discretion of who to bust. >> institutional memory is pornlt. if you are a 42-year-old police officer, you have spent 15, 20 years busting people for marijuana. it's going to be a weird thing to turn on a dime. >> extremely weird. >> are we pretending cops don't smoke? >> no. no. >> i think alcohol and marijuana are different. they are instructed in so far let's set up a system like alcohol. >> that was an explicit argument. >> alcohol is responsible for 1 million more arrests a year than all drugs combined. 2.6 million arrests a year. this idea that it's no longer an issue doesn't make sense. we have seen how the alcohol industry targeted the industry. look at liquor outlet. there's no comparison. that's why you have action groups where the number one drug

issue alcohol. it's legal. let's focus on health issues. >> tony, you were saying about the way the police are preparing for this. >> was i? >> how are the police preparing for this? >> well, in washington, the police are trying to figure out what their policy will be on things such as members of the force smoking and they are waiting on, with the legislatures to find out what the market is going to look like. i love that the liquor patrol board is allocating funds to hire a marijuana expert to come in and tell them what is marijuana, where do people currently buy it. it's going to be entertaining. in colorado, you had circles outside and business people in suits like a sharks in the water coming in. the social clash that is will develop in the process are going to be entertaining. >> tony and kevin, that was

really, really enlightening conversation. thank you. thank you for being here. what you should know for the news week ahead coming up next. ? join the counter revolution and switch to olay pro-x to see results in 28 days. anti-aging results so you look up to 12 years younger. reduce the look of pores and fight red acne for clearer skin get cleansing results as effective as a $200 system no matter what your skincare issues you'll see results in 28 days guaranteed join the counter revolution with potent, professional, pro-x. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha!

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♪ so what should you know for the week coming up? you should know that in july, after he announced his retirement, democratic congressman heath schuler of north carolina was asked what he would do after his session of congress ends. specifically, republican report blogger lee fong, a league of mine at the nation magazine asked him "are you planning to become a lobbyist?" no, schuler said. as of january 4th schuler is going to be a lobbyist. the chief lobbyist for the biggest electric utility in the country, duke energy of north carolina. duke's announcement said the job will not affect votes in his current job. it also said one of his top priorities will include tax policy on corporate dividends and that schuler right now is

leaving curb negotiations on how and where to raise taxes. a federal bankruptcy judge paved the way for hostess maker of ding dong and ho hoes to dole out bonus to the top executives. judge robert drain made the point that these executives did not run the company into bankruptcy but should be rewarded if they do a good job winding down the business they went into bankruptcy after cutting into pension plans and the bakers union refused to take a pay cut. we'll be watching whomever ultimately biez the hostess brand. cambridge university is studying the potential dangers of climate change, biotechnology and artificial intelligence. researchers insist they're not claiming robots will turn on humanity but expect intelligence to transcend biology and if intelligent machines wish people no ill, their interests may

conflict with ours. it's unlikely that robots will wipe us off the planet is the chance that we will beat them to it. i'm going to find out what my guests -- that was morbid, elizabeth? >> i want to stick with the issues and say as a historian, it can help lower your blood pressure a little bit to take a longview on this. people are going to come to the table, they're going to throw up their hands, walk away from the table, make an end run around the table and try all sorts of things. in the end, we're going to settle this. i don't think we need to worry about some of the rhetoric going around about how dire the situation is. we're going to figure it out. that's what see see. >> you're saying chill about the fiscal curb thing. >> take a breath and do come back to the table but with your blood pressure a little lower. >> you do not work in cable news. i will note for the record. >> so there's a three-part story

on income and equality. what's interesting is they're looking at geographical income and equality. it shows a gigantic concentration on wealth around washington, d.c. like i think it's seven out of the ten wealthiest counties are around d.c., and that is because of the incredible unhealthy marriage between the private sector and the government, and i think should worry libertarians. they're concerned about this. also liberals and people who care about -- we have a big project looking at -- >> which is inside the beltway itself. >> absolutely. where we look at cronyism and what it means for people. so i think this is a story that we should look at and try to understand. this unhealthy relationship between the private sector and the government. i agree. it cuts across points that --

there's a lot written about the way that this growth has happened and tim carney who has been on the show, who is a great reporter, conservative, just announced as a fellow to e.i. he has been writing about the cronyism and when you're in washington, i mean, the kind of lobbying industrial complex is incredibly apparent to you. maya. >> turns 12 and kie wily men dell turned nine. that's the most important thing for everyone to now. happy birthday, babies. my two biggest successes. the conclusion we released a report calling falling off the fiscal cliff which will make you not chill about what's going to be happening to real people in this country. particularly blacks and latinos who are going to take a huge percentage of the hit on the cuts to public programs. >> this is an important point. on the left progressives said go over the curb, which i agree. but the cuts will cut deeply.

detric mohammed. >> naacp opportunity, diversity report card. i think the importance of this is to look at the private sector and how it's been implemented. one the greatest challenges to the economy is racial equality. you can't have a middle class when -- so i hope we're going to be doing serious advocacy on this. >> this looks at the hotel and resort industry. >> we'll put that on our facebook page, blog and tumbler. i want to thank my guests this morning. maya wily from the center for social inclusion and deaderick mohammed from the naacp. thank you for joining us. we'll be back next week on saturday and sunday. author dan savage will have a hard look at bringing your energy production into the 21st century. on today's mhp, tuesday

marks the day when those start to make the case. is it a new day for the republicans or is it all about doubling down on failed and rejected policies of the past? that and a lot more on melissa harris-perry. we'll see you next week here on "up." two years ago, the people of bp made a commitment to the gulf. bp has paid over twenty-three billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.

i have obligations. cute tobligations, but obligations.g.